Global

Reserves Cross US$3tril In Emerging Marts. Developing nations from Colombia to South Korea have accumulated so many dollars through intervening to curb currency gains that their foreign reserves now exceed US$3 trillion (RM9.5 trillion) for the first time. The 12 emerging nations with the biggest holdings outside of China added US$49 billion in April, May and June, more than any quarter since September 2012, data compiled by Bloomberg show. Of 23 major developing-nation currencies, 18 are forecast by analysts to drop by year-end, suggesting the strategy is proving effective in keeping exchange rates competitive. South Korea’s reserves rose to an all-time high of US$367 billion last month amid talk authorities stepped up intervention to limit the won’s advance. India’s stockpile climbed to an almost three-year high of US$316 billion as of July 4, while Indonesia’s rose to US$108 billion in June, more than double the level at the end of 2008. (Bloomberg)

Malaysia

‘Hike In OPR Will Have Minimal Impact On Exports’. The increase in the overnight policy rate (OPR) will have a minimal impact on the country's exports, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said. "The quantum is not that large to affect the cost of production," he told reporters after chairing the Focus Group Meeting for the Budget 2015 here today. He said that Malaysia's exports this year was increasing month on month. "Many other countries have adjusted the OPR earlier , some about three years ago," he added. Bank Negara Malaysia announced a 25 basis points increase in the OPR to 3.25 per cent last week. (Bernama)

Asia

Singapore Exports Fall For Second Straight Month. Singapore's exports fell for a second straight month in June, trade agency International Enterprise Singapore said on Thursday, hit by a slump in shipments of electronics. Singapore's exports of electronics fell 17.4 % year-on-year in June after a 15.3 % decline in May, taking non-oil domestic exports down 4.6 % in June - double the 2.3 % drop forecast in a Reuters survey. (Reuters)

Japan Government Raises Economy View As Sales Tax Hangover Fades. Japan's government raised its assessment of the economy on Thursday because a decline in consumer spending after a sales tax increase is starting to fade due to improving consumer sentiment and a tight labor market. It was the first time in six months that the government has upgraded its overall assessment. The government said personal spending was showing signs of recovery, an upgrade from last month, as an increase in the nationwide sales tax to 8 % from 5 % on April 1 was having only a temporary impact onconsumption. (Reuters)

China Pledges To Further Promote Targeted Economic Stimulus. China's State Council, or cabinet, pledged at a meeting on Wednesday to further promote targeted economic stimulus steps, the China Securities Journal reported on Thursday, quoting a report by the official Xinhua news agency. The government would also support railways, urban infrastructure and irrigation projects. The policy pledge comes after China posted slightly better- than-expected economic growth of 7.5 % in the second quarter of this year, as a burst of government stimulus paid dividends, while analysts said Beijing would likely need to offer more support to meet its annual growth target as the property market slows. (Reuters)

USA

Jobless Claims In U.S. Unexpectedly Decreased Last Week. The number of Americans filing applications for unemployment benefits unexpectedly dropped last week, showing further healing in the labor market. Jobless claims declined by 3,000 to 302,000 in the week ended July 12, a Labor Department report showed today in Washington. The median forecast of 51 economists surveyed by Bloomberg projected 310,000. The number of people continuing to receive jobless benefits fell to a seven-year low. (Bloomberg)

U.S. Housing Starts, Permits Decline In June. U.S. housing starts and building permits unexpectedly fell in June, suggesting the housing market recovery was struggling to get back on track after stalling in late 2013. Groundbreaking declined 9.3 % to a seasonally adjusted annual 893,000 unit-pace, the lowest since September, the Commerce Department said on Thursday. April's starts were revised to show a steeper 7.3 % fall instead of the previously reported 6.5 % drop. Economists polled by Reuters had forecast starts rising to a 1.02 million-unit rate last month. Housing has been constrained by higher mortgage rates. A shortage of properties for sale has pushed up prices, reducing affordability for many. (Reuters)

Consumer Confidence Sustains High Level On Buying. American consumer sentiment held last week near the highest level of the year as an improving job market made households more inclined to spend. The Bloomberg Consumer Comfort Index was little changed at 37.5 in the week ended July 13 compared with 37.6 in the prior period, a report today showed. The buying-climate gauge climbed to its second-highest reading in more than six years, offsetting a decline in views on the economy and finances. (Bloomberg)

Europe

Euro Zone June Inflation Unchanged At Low Levels As Expected. Euro zone inflation stayed low as expected in what the European Central Bank calls the "danger zone" in June as falling prices of food and phone calls offset more expensive tobacco and restaurants, data showed on Thursday. Consumer prices in the 18 countries using the euro rose 0.1 % on the month in June for a 0.5 % year-on-year gain -- the same annual inflation rate as in May, data from the European Union's statistics office Eurostat showed. The annual rate is well below the ECB's inflation target of close to, but below 2%. (Reuters)

European Car Sales Up 4.3pc In June. European car sales rose 4.3 per cent in June as demand at Renault SA’s budget Dacia division and Volkswagen AG’s Seat nameplate contributed to the longest stretch of monthly delivery gains in four years. Registrations increased to 1.23 million vehicles from 1.18 million a year earlier, the European Automobile Manufacturers’ Association said yesterday. That marked 10 consecutive months of growth, matching an expansion from June 2009 through March 2010. Sales surged 32 per cent at Dacia and 13 per cent at Seat. (Bloomberg)

Russian Retail Sales Grow Slowest Since 2010 On Sanctions. Russian retail sales climbed at the slowest pace since 2010 and disposable incomes unexpectedly shrank as U.S. and European sanctions battered the ruble and inflation soared to the fastest in almost three years. Sales climbed 0.7 % from a year earlier in June after a 2.1 % increase in May, the Federal Statistics Service in Moscow said today in an e-mailed statement. The median estimate of 18 economists surveyed by Bloomberg was for a 1.8 % gain. Real disposable incomes fell 2.9 %, surprising analysts who projected a 3.5 % advance. (Bloomberg)

MENA

Turkish Central Bank Cuts Interest Rates In Line With Forecasts. Turkey’s central bank made what it called a “measured” cut to two of its three main interest rates today, citing a limited fall in the inflation rate and favorable global liquidity. The Monetary Policy Committee, led by Governor Erdem Basci, lowered its benchmark repurchase and overnight borrowing rates by 50 basis points to 8.25 % and 7.5 %, respectively, according to a statement posted on the bank’s website. The bank maintained its overnight lending rate at 12 %. All three decisions match the median estimates in separate Bloomberg surveys. (Bloomberg)

Egypt Unexpectedly Raises Rates After Increase In Fuel Costs. Egypt’s central bank unexpectedly raised interest rates after a government move this month to increase energy prices threatened to push up the cost of consumer goods. The Monetary Policy Committee raised the benchmark overnight deposit rate by one %age point to 9.25 %, according to a statement on the bank’s website. The overnight lending rate was also raised 100 basis points to 10.25 %, it said. All six economists surveyed by Bloomberg had forecast the deposit rate to stay unchanged. (Bloomberg)

Currencies

Dollar Eases, But Climbs Vs Russian Currency After Airliner Crash. Russia's rouble tumbled against the dollar on Thursday, but the greenback eased amid a global scramble to defensive assets by investors spooked by news a Malaysian passenger jet had been brought own in Ukrainian airspace. An index that measures the dollar against a basket of six other leading currencies traded tightly throughout the day and last was off 0.05 % at 80.517, but still near a one-month high touched on Wednesday. Against the rouble, however, the dollar was up 1.8 %. The euro weakened against the yen to a nadir of 136.93 yen, its lowest since early February, and last traded at 136.87 yen, off 0.40 % on the day. (Reuters)

Commodities

U.S. Oil Jumps $2 On Jet Crash, New Russia Sanctions. U.S. crude oil jumped by more than $2 on Thursday after a Malaysian airliner was shot down over eastern Ukraine, dramatically escalating the crisis between Russia and the West one day after the U.S. ratcheted up sanctions against Moscow. U.S. crude rose for a second straight session, settling up $1.99 at $103.19 per barrel, its strongest showing since mid-June and its largest two-day rise since December 2013. U.S. crude had lost nearly $9 since it fell from a June 20 high of $107.73 to $99.01 on July 15, before resuming its rise. Brent for September, which became the front-month contract on Thursday, rose by 72 cents to settle at $107.89. (Reuters)

Gold Edges Above $1,300/Oz As Russia Sanctions Hit Equities. Gold rose on Thursday, extending the previous day's recovery from four-week lows as investors took advantage of lower prices to buy and as a fresh round of U.S. sanctions on Russia weighed on stock markets. Spot gold was up 0.4 % at $1,303.60 an ounce at 1340 GMT, while U.S. gold futures for August delivery were up $4.90 an ounce at $1,304.70. Spot palladium peaked at $886 an ounce and was later up 1.3 % at $881.80. Among other precious metals, spot platinum was up 1 % at $1,492.80 an ounce, while spot silver was up 0.5 % at $20.78 an ounce. (Reuters)